- Rising Middle East tensions disrupt shipping in the Strait of Hormuz and Persian Gulf
- Delays at sea increase as many vessels anchor, slowing global shipping operations
- Freight rates for crude carriers from Gulf to China have nearly tripled since February
As tensions continue in the Middle East, the impact is now spreading beyond land and into global shipping lanes, with the Strait of Hormuz emerging as the epicentre.
While countries like the UAE continue to function normally on the ground, the real pressure is building at sea. NDTV spoke to ship owner Captain Pradeep, who says the situation is becoming increasingly difficult for global shipping operations.
A large number of vessels are currently anchored across the Persian Gulf and the Gulf of Oman as rising tensions slow down movement.
"There are too many ships waiting at anchor. This is not normal. Delays are increasing and it is affecting the entire shipping cycle," he told NDTV.
At the same time, the cost of transporting crude oil has surged sharply. Pradeep said that freight rates for very large crude carriers from the Middle East or Gulf to China have jumped from an average of $8.6 million in February to about $23.7 million in early March, nearly a threefold increase.
He said routes from the US and Gulf to China have also seen a rise, from around $14.8 million to $24.6 million, showing a sharp jump.
Other segments are seeing steep increases. Suezmax tankers from the Middle East Gulf to the east have moved from about $4.7 million to nearly $17 million, more than three times higher.
Aframax tankers on similar routes have risen from roughly $3.5 million to $8.4 million, more than doubling.
"Freight rates have gone up sharply because the risk is high. Owners are factoring in uncertainty before sending ships into this zone," Pradeep said.
Captain Pradeep
Insurance is another major pressure point. He said that "war-risk premiums, which were earlier around 0.10 to 0.15 per cent of vessel value, are now being quoted between 0.5 to 1.5 per cent, and in some cases going up to 2.5 per cent just for crossing the Strait of Hormuz."
Using data for a tanker valued at $100 million, this means insurance costs have risen from roughly $100,000-150,000 earlier to anywhere between $500,000 and $2.5 million now.
"Insurance has become a major cost. Just crossing this region is now significantly more expensive than before," he said.
At the same time, protection and indemnity insurance exposure has reportedly increased nearly five times due to rising operational risks.
Fuel costs are adding further pressure. Bunker fuel prices have surged from around $500 per tonne to nearly $1,200 per tonne, sharply increasing the cost of every voyage.
Beyond numbers, there is also a strong human factor.
"Crew safety is a big concern. There are war-risk bonuses, higher wages, and in some cases hesitation from crew to sail through high-risk areas," Pradeep said.
Even if crude oil prices remain stable, the landed cost of oil is rising due to expensive transportation. "This is not just about crude oil. LNG, LPG and petrochemical cargo also move through this route. Any disruption here affects global supply chains."
The Strait of Hormuz carries nearly one-fifth of the world's oil supply, making it one of the most critical arteries of the global economy.
A prolonged disruption can impact multiple sectors. Fertilizer prices may rise, manufacturing could slow down, and supply chains may tighten across industries. This can trigger inflation, impact financial markets, and force governments and companies to absorb higher costs.
"This is no longer a regional issue. What is happening here will have a global impact on trade, energy and markets," he said.
